The final 2025 report from the University of Michigan also found that consumers expect improvement in inflation over the next year.

Harvard economist calls the latest inflation report "positive news" as the rate falls to 2.7%, surprising analysts who expected it to stay above 3%.

Consumer prices rose 2.7% in November compared to a year earlier, marking a notable reduction from 3% year-over-year inflation in September, the most recent month for which complete data is available. Inflation stands at its lowest level since July.

“Big picture, we're seeing a weakening labor market, maybe inflation that's relatively stable, possibly coming down a little bit, but still above the Fed's 2% target,” said Ann Owen at Hamilton College. The data were collected in late November, during peak Black Friday discount season.

Commerce Secretary Howard Lutnick says the drop in inflation to 2.7% shows White House policies are working, even as consumer confidence remains low.

One way the U.S. government reacts and responds to the challenge of helping retirees succeed in their battle to handle rising prices is to provide a cost-of-living adjustment (COLA) to people’s Social Security monthly benefits, which average about $2,000, according to the Social Security Administration (SSA). For 2026, COLA will increase by 2.8%.

U.S. stocks are rising following an encouraging report on inflation that could help the Federal Reserve keep cutting interest rates next year.

The Bureau of Labor Statistics released the November consumer price index which showed that CPI inflation remained well above the Federal Reserve's 2% target rate.